No and no. In climates like those in Europe, Canada, or the North of the US, glass vivariums (not aquariums) still provide adequate ventilation and an environment where it is easier to keep temperatures and humidity steady throughout the year. In Europe in particular, just about everyone uses glass enclosures extensively with great success. So no, they are not bad, depending on circumstance. Aquariums are the less desirable choice.
And no, paper towel is worse than something particulate like soil. Paper towel does not dissolve when wet and breaks apart like toilet paper does, and so if your chameleon ever eats a chunk of it it will remain intact and stands a much higher chance of becoming stuck. I think you're better off having a tank full of fine, organic soil than a tank full of paper towels.
To the OP - if you want to put something on the bottom for aesthetic reasons, you're going to have to get a little creative. A good idea I've seen is finding a length of that artificial grass they sell at home improvement stores. Some looks very cheap and artificial but others look very good for not a lot of money. You would cut out what you need, lay it down, and then remove it when ever you want to clean the tank. Large river rocks also look nice but add a lot of weight to the tank.
